AGREEMENT AND PLAN OF MERGER BY AND AMONG RAMBUS INC., PADLOCK ACQUISITION CORP., CRYPTOGRAPHY RESEARCH, INC., AND CHRISTOPHER LEIGH RODGERS, AS SHAREHOLDER REPRESENTATIVE (FOR THE LIMITED PURPOSES DESCRIBED HEREIN) DATED AS OF MAY 12, 2011

such policies or bonds.  In addition, there is no pending claim of which its total value (inclusive of defense expenses) will exceed the policy limits.  All premiums due and payable prior to the date of this Agreement under all such policies and bonds have been paid and the Company are otherwise in material compliance with the terms of such policies and bonds.  The Company has no knowledge of any threatened termination of any of such policies.  The Company has never maintained, established, sponsored, participated in or contributed to any self-insurance plan.

2.25        Compliance with Laws.  Except with respect to proceedings before any governmental Authority in respect of matters related to Intellectual Property Rights, which are understood to be governed by the relevant portions of Sections 2.15 and 2.16, the Company has complied in all material respects with, is not in material violation of, and has not received any written notices of suspected, potential, or actual violation with respect to, any applicable foreign, federal, state or local statute, law or regulation; provided, however, that for the avoidance of doubt, the representation and warranty set forth in this Section 2.25 shall not be deemed to relate to, supplement, supersede or otherwise affect the representations and warranties of the Company set forth in any other section of this Article II regarding the Company’s compliance with any foreign, federal, state or local statute, law or regulation, and each such other section shall be deemed to contain exclusively all of the Company’s representations and warranties regarding its compliance with foreign, federal, state or local statutes, laws or regulations related to the respective subject matters of the representations and warranties set forth therein.

2.26        Export Control Laws.  The Company has at all times conducted in all material respects its export transactions in accordance with all applicable U.S. export and reexport controls, including the United States Export Administration Act and Regulations, Foreign Assets Control Regulations, and the International Traffic in Arms Regulations, and all other applicable import/export controls in other countries in which the Company conducts business.  Without limiting the foregoing:

(a)   The Company has obtained all export licenses, license exceptions and other consents, notices, waivers, approvals, orders, authorizations, registrations, declarations and filings with any Governmental Entity required by the Company for (i) the export and reexport of products, services, software and technologies and (ii) releases of technologies and software to foreign nationals located in the United States and abroad (“Export Approvals”);

(b)   The Company is in compliance in all material respects with the terms of all applicable Export Approvals;

(c)   There are no pending or, to the Knowledge of the Company, threatened claims against the Company with respect to such Export Approvals; and

(d)   No Export Approvals are required for the transfer of any export licenses held by the Company to Parent or the Surviving Corporation, except for such Export Approvals that can be obtained expeditiously and without material cost.

2.27        Foreign Corrupt Practices Act.  The Company (including any of its officers, directors, employees, agents or other Person associated with or acting on its behalf) has not, directly or indirectly, taken any action which would cause the Company to be in violation of the Foreign Corrupt Practices Act of 1977, as amended, or any rules or regulations thereunder, used any corporate funds for unlawful contributions, gifts, entertainment or other unlawful expenses relating to political activity, made any unlawful payment to foreign or domestic government officials or employees or made any bribe, rebate, payoff, influence payment, kickback or other similar unlawful payment.  The Company (including any of its officers, directors, agents, employees or other Person associated with or acting on its behalf) has not, directly or indirectly, taken any

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action which would cause the Company to be in violation of the Money Laundering Directive 2005/60/EC or Directive 2006/70/EC of the European Parliament.

2.28        Complete Copies of Materials.  The Company has Made Available true and complete copies of each document (or summaries of same) that is referenced or identified in the Disclosure Schedule.

ARTICLE III

REPRESENTATIONS AND WARRANTIES OF PARENT AND MERGER SUB

Each of Parent and Merger Sub hereby represents and warrants to the Company that on the date hereof and as of the Effective Time as follows:

3.1   Organization and Standing.  Parent is a corporation duly organized, validly existing and in good standing under the laws of the State of Delaware.  Merger Sub is a corporation duly organized, validly existing and in good standing under the laws of California and is a wholly owned subsidiary of Parent.  Each of Parent and Merger Sub has the corporate power to own its properties and to carry on its business as now being conducted and is duly qualified or licensed to do business and is in good standing in each jurisdiction in which the failure to be so qualified or licensed would have a Parent Material Adverse Effect.  Merger Sub has been organized solely for the purpose of consummating the transactions contemplated herein and does not, and has never, conducted any business or other operations.

3.2   Parent Capitalization.  As of March 31, 2011, the authorized capital stock of Parent consisted of (a) 500,000,000 shares of Parent common stock, of which 107,672,235 shares were outstanding, and (b) 5,000,000 shares of preferred stock, of which no shares were outstanding.  As of December 31, 2010, Parent had stock options and other awards outstanding for 14,687,390 shares of Parent Common Stock and stock options and other awards available for grant for 5,933,930 shares of Parent Common Stock.  Since March 31, 2011, the authorized capital stock of Parent has not changed and Parent has not issued any equity securities except through employee or director stock option exercises in the ordinary course of business.  There are no outstanding contractual obligations or rights of Parent to repurchase, redeem or otherwise acquire any shares of its capital stock or other equity interests other than the 5% convertible senior notes due June 15, 2014 of Parent and the put right of Samsung Electronics Co., Ltd. to Parent related to up to 4,788,125 shares of Parent Common Stock, each in accordance with its contractual terms.

3.3   Authority.  Each of Parent and Merger Sub has all requisite corporate power and authority to enter into this Agreement and any Related Agreements to which it is a party and to consummate the transactions contemplated hereby and thereby.  The execution and delivery by each of Parent and Merger Sub of this Agreement and any Related Agreements to which it is a party and the consummation of the transactions contemplated hereby and thereby have been duly authorized by all necessary corporate action on the part of Parent and Merger Sub.  This Agreement and any Related Agreements to which Parent and Merger Sub are parties have been duly executed and delivered by Parent and Merger Sub and constitute the valid and binding obligations of Parent and Merger Sub, enforceable against each of Parent and Merger Sub in accordance with their terms, except as such enforceability may be limited by (a) applicable insolvency, bankruptcy, reorganization, moratorium or other similar laws affecting creditors’ rights generally, and (b) applicable equitable principles (whether considered in a proceeding at law or in equity).

3.4   No Conflict.  The execution and delivery by Parent of this Agreement and any Related Agreement to which Parent is a party, and the consummation of the transactions contemplated hereby and thereby, will not result in any Conflict under (a) any provision of its organizational and governing documents; (b) any

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Contract to which Parent is a party or by which any of its properties or assets (whether tangible or intangible) are bound; or (c) subject to obtaining the approvals contemplated by Section 3.5, any judgment, order, decree, statute, law, ordinance, rule or regulation applicable to Parent or any of its properties or assets (whether tangible or intangible), except in each case that would not be reasonably expected to have a Parent Material Adverse Effect.

3.5   Consents.  No consent, waiver, approval, order or authorization of, or registration, declaration or filing with, any Governmental Entity is required by or with respect to Parent or Merger Sub in connection with the execution and delivery of this Agreement and any Related Agreements to which Parent or Merger Sub is a party or the consummation of the transactions contemplated hereby and thereby, except for (a)  the filing of the Agreement of Merger with the Secretary of State of the State of California, (b) such filings as may be required under the Antitrust Laws, or (c) such consents, notices, waivers, approvals, orders, authorizations, registrations, declarations and filings as may be required under applicable securities laws.

3.6   SEC Filings; Financial Statements.  Since January 1, 2010, Parent has filed on a timely basis all reports required to be filed by it under the Exchange Act.  Such reports required to be filed by Parent under the Exchange Act, together with any materials filed by Parent under the Exchange Act, whether or not any such reports were required to be filed, being collectively referred to herein as the “Parent SEC Reports.”  As of their respective dates, the Parent SEC Reports complied with the requirements of the Exchange Act and the rules and regulations of the SEC promulgated thereunder, and none of the Parent SEC Reports, when filed, contained any untrue statement of a material fact or omitted to state a material fact required to be stated therein or necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading.  As of the date of this Agreement, there are no outstanding or unresolved comments in comment letters received by Parent from the SEC staff, and none of the Parent SEC Reports is the subject of ongoing SEC review or outstanding SEC comment.  The financial statements of Parent included in the Parent SEC Reports complied in all material respects with applicable accounting requirements and the rules and regulations of the SEC with respect thereto as in effect at the time of filing.  Such financial statements have been prepared in accordance with GAAP, except as may be otherwise specified in such financial statements, the notes thereto and except that unaudited financial statements may not contain all footnotes required by GAAP or may be condensed or summary statements, and fairly present in all material respects the consolidated financial condition of Parent and its consolidated subsidiaries as of and for the dates thereof and the results of operations and cash flows for the periods then ended, subject, in the case of unaudited statements, to normal, year-end audit adjustments.

3.7   No Changes.  Since February 28, 2011, (a) there has been no event, occurrence, circumstance or development that, individually or in the aggregate, with or without the passage of time, has had or that would result in a Parent Material Adverse Effect and (b) other than in connection with this Agreement, Parent has not incurred any material liabilities other than (i) trade payables and accrued expenses incurred in the ordinary course of business consistent with past practice and (ii) liabilities not required to be reflected in Parent’s financial statements pursuant to GAAP or required to be disclosed in filings made with the SEC.

3.8   Issuance of Parent Common Stock.  The shares of Parent Common Stock are duly authorized and, upon payment for the shares and issuance upon the Effective Time pursuant to the terms of this Agreement, will be duly and validly issued, fully paid and non-assessable, and free from all Taxes, Liens and charges and will not be subject to preemptive or similar rights.

3.9   Listing/WKSI.  The Parent Common Stock is listed on The NASDAQ Stock Market and there are no proceedings to revoke or suspend such listing. On the date hereof, the Parent qualifies as a “well known

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seasoned issuer” under applicable rules and regulations of the SEC and it is eligible to file a registration statement on Form S-3 with the SEC covering the Merger Share Amount.

ARTICLE IV

CONDUCT PRIOR TO THE EFFECTIVE TIME

During the Pre-Closing Period, the Company covenants and agrees with Parent as follows:

4.1   Conduct of Business of the Company.

(a)   Except for the Company Distributions or as expressly contemplated by this Agreement or as Parent shall otherwise consent in writing, the Company shall conduct its business in the ordinary course, pay its debts and Taxes when due (subject to the right of Parent to review and approve any Returns in accordance with this Agreement), pay or perform its other obligations when due, and, to the extent not inconsistent with such business, use commercially reasonable efforts to preserve intact its present business organizations, keep available the services of its present officers and Key Employees and preserve its relationships with its customers, suppliers, distributors, licensors, licensees and others having business dealings with it.  Notwithstanding anything to the contrary set forth in this Agreement, the Company may declare and pay the Company Distributions as contemplated in Recital H to this Agreement.

(b)   Except for the Company Distributions or as expressly contemplated by this Agreement, or except as Parent shall otherwise consent in writing, the Company shall not:

(i)         make any expenditure or enter into any commitment for an expenditure exceeding $100,000 (other than the payment of rent, payroll, principal and interest obligations on Indebtedness of the Company in the ordinary course of business and consistent with past practices, and payments under obligations existing as of the date hereof), except for (A) obligations arising under any Outbound License Agreement and (B)  payments to outside counsel (and other legal service providers) for legal representation of the Company, or to Seven Hills for amounts owed by the Company, in connection with the transactions contemplated by this Agreement;

(ii)        (A) sell, license or transfer to any other Person any rights to any Company Owned Intellectual Property Right or enter into any agreement with respect to any Company Owned Intellectual Property Right with any Person or with respect to any Intellectual Property Right of any Person except with respect to non-exclusive license agreements entered into in the ordinary course of business consistent with past practice, (B) buy or license any Intellectual Property Right or enter into any agreement with respect to the Intellectual Property Right of any Person except for non-exclusive licenses of off-the-shelf software obtained in the ordinary course of business consistent with past practice, (C) enter into any agreement with respect to the development of any Intellectual Property Right with a Third Party, or (D) materially reduce pricing or royalties charged by the Company to its customers or licensees except as contemplated by an Outbound License Agreement existing as of the date hereof, or materially increase the pricing or royalties set or charged by Persons who have licensed Intellectual Property Rights to the Company except as contemplated by an Inbound License Agreement;

(iii)       terminate or extend, or adversely amend, waive or modify (other than immaterial amendments, waivers or modifications) the terms of, any Contract disclosed on Section 2.16(g)(i) or Section 2.16(g)(ii) of the Disclosure Schedule (or agree to do so), or enter into any Contract that would

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have been required to have been disclosed on Section 2.16(g)(i) or Section 2.16(g)(ii) of the Disclosure Schedule had such Contract been entered into prior to the date hereof, except with respect to agreements for the non-exclusive licensing associated with the making, using, selling and importing of products in the ordinary course of business consistent with past practices;

(iv)       enter into or adversely amend, waive or modify the terms of any Contract pursuant to which any other party is granted marketing, distribution, development or similar rights of any type or scope with respect to any products or technology of the Company;

(v)        commence, except in response to a lawsuit levied against the Company, or settle any litigation;

(vi)       repurchase, redeem or otherwise acquire, directly or indirectly, any shares of Company Common Stock (or options, warrants or other rights exercisable therefor), other than (a) pursuant to the terms of any stock restriction agreement or stock option agreement and (b) any cash out of options contemplated by this Agreement;

(vii)      issue, grant, deliver or sell any shares of Company Common Stock or any securities convertible into, or subscriptions, rights, warrants or options to acquire, or other agreements or commitments of any kind or character obligating it to issue, grant, deliver or sell any such shares or other convertible securities convertible into Company Common Stock or equity-based awards (whether payable in cash, stock or otherwise), in each case other than the issuance of shares of Company Common Stock pursuant to the exercise of Company Options outstanding as of the date of this Agreement;

(viii)     cause or permit any amendments to its Charter Documents or other equivalent organizational documents;

(ix)       acquire or agree to acquire by merging or consolidating with, or by purchasing all or a portion of the assets or any equity securities of, or by any other manner, any business or any corporation, partnership, association or other business organization or division thereof, or otherwise acquire or agree to acquire any assets (except for asset acquisitions in the ordinary course of business that are not material to the Company);

(x)        other than in the ordinary course of its business consistent with past practice, sell, lease or otherwise dispose of any of its tangible properties or assets, including the sale of any accounts receivable of the Company or grant or otherwise create or consent to the creation of any easement, covenant, restriction, assessment or charge affecting any owned property or leased property or any part thereof, or convey, assign, sublease, license or otherwise transfer all or any portion of any amount of owned property or leased property or any interest or rights therein;

(xi)       incur any Indebtedness (other than trade payables in the ordinary course of business consistent with past practices) or guarantee any Indebtedness or issue or sell any debt securities or guarantee any debt securities or other similar obligations of others;

(xii)      grant any loans to others (other than advances to employees for travel and business expenses in the ordinary course of business consistent with past practices) or purchase debt securities of others or amend the terms of any outstanding loan agreement;

(xiii)     except for the hiring of new employees below director level of seniority consistent with past practice: (A) hire, offer to hire or terminate any employees, or encourage any employees

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to resign from the Company, in each case, other than as contemplated by this Agreement, or (B) increase the salary (including by payment of or agreement to pay bonus amounts) of any employee or create any new liabilities owed by the Company to employees other than the Company Distributions or as expressly contemplated by this Agreement;

(xiv)     other than the contemplated Company Distributions, grant any severance, change in control or termination pay (in cash or otherwise) to any Employee, including any officer, except payments made pursuant to standard written agreements outstanding on the date hereof and disclosed in the Disclosure Schedule;

(xv)      (A) adopt, amend or terminate any Company Employee Plan other than as contemplated under this Agreement, (B) enter into or amend any Employee Agreement (other than job offers and agreements for new employees below director level of seniority consistent with past practice) or collective bargaining agreement, or (C) pay or agree to pay any special bonus or special remuneration (whether payable in cash, equity or otherwise)  to any director or Employee, or increase or agree to increase the salaries, wage rates, fringe benefits (whether payable in cash, equity or otherwise) or other compensation or benefits (including rights to severance or indemnification) of its Employees, except in the case of (A), (B) or (C), for the Company Distributions (and any agreements entered into by the Company and any employee or consultant receiving a portion of the Company Distributions, which such agreements shall contain an employee or consultant release) and payments made pursuant to this Agreement or written agreements outstanding on the date hereof and disclosed in the Disclosure Schedule;

(xvi)     revalue any of its assets (whether tangible or intangible) by an amount exceeding $25,000 in the aggregate, including writing off notes or accounts receivable, settle, discount or compromise any accounts receivable, or reverse any reserves, in each case other than in the ordinary course of business as conducted on the Balance Sheet Date and consistent with past practice or in connection with the preparation of financial statements and audits of the Company by KPMG or PWC;

(xvii)    pay, discharge or satisfy, in an amount in excess of $100,000 any claim, Liability, loan or obligation (absolute, accrued, asserted or unasserted, contingent or otherwise), other than the payment, discharge or satisfaction of trade payables, license fees, royalties and other liabilities in the ordinary course of business or that are reflected or reserved against in the Current Balance Sheet and payments to outside counsel (and other legal service providers) for legal representation of the Company, or to Seven Hills for amounts owed by the Company, in connection with the transactions contemplated by this Agreement;

(xviii)   make or change any Tax election, adopt or change any Tax accounting method, enter into any closing agreement in respect of Taxes, settle or compromise any claim or assessment in respect of Taxes, or consent to any extension or waiver of the limitation period applicable to any claim or assessment in respect of Taxes, or file or amend any Return unless such Return or amended Return has been provided to Parent for review within a reasonable period prior to the due date for filing in accordance with Section 5.9;

(xix)      enter into or amend any distribution, joint venture, strategic alliance or joint marketing or any similar arrangement or agreement;

(xx)       change the Company’s accounting policies or procedures (other than as required by GAAP), including with respect to reserves for doubtful accounts, or payment or collection policies or practices;

(xxi)      voluntarily take, or agree in writing or otherwise to take, or propose to take, any of the actions described in Section 4.1(b)(i) through Section 4.1(b)(xx), inclusive, or any other action

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that would (A) cause or result in any of its representations and warranties of the Company set forth herein being untrue or incorrect, (B) prevent or materially hinder the Company from performing its covenants hereunder or consummating the Merger or any other transaction contemplated hereby, or (C) delay the consummation of the Merger or any other transaction contemplated hereby; or

(xxii)     make any representations or issue any communications to employees that are inconsistent with this Agreement or the transactions contemplated hereby including any representations regarding offers of employment from Parent.

4.2   No Solicitation.

(a)  Until the Closing or earlier termination of this Agreement, the Company shall not take (nor shall the Company permit, as applicable, any of its respective officers, directors, employees, agents, affiliates or representatives of any of the foregoing), and shall cause to be ceased as of the date hereof, any action to solicit, initiate, seek, encourage, facilitate or support any inquiry, or any proposal or offer from, furnish any information to, or participate in any discussions or negotiations with, any Person (other than with Parent) regarding any (i) acquisition of all or a significant portion of the Company’s business, properties, assets whether by merger or consolidation with or involving the Company or any other form of transaction or series of transactions; (ii) acquisition of, or investment in, any shares of the Company’s securities (whether or not outstanding), equity interests or assets of the Company whether by stock purchase, asset purchase, merger, consolidation, reorganization, restructuring, license or any other form of transaction or series of transactions; or (iii) exclusive license agreements, agreements that contemplate the transfer of all or a significant portion of the Company Owned Intellectual Property Rights, whether under development or yet to be developed (each, a “Transaction Proposal”).

(b)  The Company will not, nor will it authorize or permit any of its officers, directors, affiliates, Shareholders or Employees or any investment banker, attorney or other advisor or representative retained by any of them (all of the foregoing collectively being the “Company Representatives”) to, directly or indirectly, (i) solicit, initiate, seek, entertain, encourage, facilitate, support or induce (or assist in or cooperate with any Person in) the making, submission or announcement of any inquiry, expression of interest, proposal or offer that constitutes, or would reasonably be expected to lead to, a Transaction Proposal; (ii) enter into, participate in, maintain or continue any discussions, communications (except solely to provide written notice as to the existence of these provisions) or negotiations regarding any inquiry, expression of interest, proposal or offer that constitutes, or would reasonably be expected to lead to, a Transaction Proposal, or otherwise take any action to facilitate any inquiry, expression of interest, proposal or offer that constitutes, or would reasonably be expected to lead to, a Transaction Proposal; (iii) agree to, accept, approve, endorse or recommend (or publicly propose or announce any intention or desire to agree to, accept, approve, endorse or recommend) inquiry, expression of interest, proposal or offer that constitutes, or would reasonably be expected to lead to, any Transaction Proposal; (iv) enter into any letter of intent or any other Contract contemplating or otherwise relating to any Transaction Proposal; (v) submit any Transaction Proposal to the vote of any security holders of the Company; (vi) consummate or otherwise effect a transaction providing for any transaction contemplated by a Transaction Proposal, or (vii) disclose or make available any information not customarily disclosed to any Person concerning the Company’s businesses, properties, assets or technologies, or afford to any Person access to its properties, technologies, books or records.

(c)  The Company shall immediately notify Parent orally and in writing after receipt (and in any case within 24 hours of receipt) by the Company and/or any Company Representatives of (i) any Transaction Proposal; (ii) any inquiry, proposal or offer that constitutes, or would reasonably be

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expected to lead to, a Transaction Proposal; (iii) any other notice that any Person is considering making a Transaction Proposal, or (iv) any request for information by any Person or Persons (other than Parent) not customarily disclosed to any Person concerning the Company’s businesses, properties, assets or technologies.  Such notice shall describe (A) the terms and conditions of such Transaction Proposal, inquiry, proposal, offer, notice or request, and (B) the identity of the Person or Group (as defined in Section 13(d) of the Securities Exchange Act of 1934, as amended, and the rules and regulations of the U.S. Securities and Exchange Commission promulgated thereunder) making any such Transaction Proposal, inquiry, proposal, offer, notice or request. The Company shall keep Parent fully informed of the status and details of, and any modification to, any such Transaction Proposal, inquiry, proposal or offer and any correspondence or communications related thereto and shall provide to Parent a true, correct and complete copy of such Transaction Proposal, inquiry, proposal or offer and any amendments, correspondence and communications related thereto, if it is in writing, or a reasonable written summary thereof, if it is not in writing.  The Company shall provide Parent with 72 hours prior notice (or such lesser prior notice as is provided to the members of the Board of Directors of the Company) of any meeting of the Board of Directors of the Company at which the Board of Directors of the Company is reasonably expected to discuss any Transaction Proposal.

(d)  The Company will, and will cause the Company Representatives to, immediately cease any and all existing activities, discussions or negotiations with any third parties conducted heretofore with respect to any Transaction Proposal.

(e)  The Company shall be deemed to have breached the terms of this Section 4.2 if any Company Representatives shall take any action, whether in his or her capacity as such or in any other capacity, that is prohibited by this Section 4.2.  The parties hereto agree that irreparable damage would occur in the event that the provisions of this Section 4.2 were not performed in accordance with their specific terms or were otherwise breached.  It is accordingly agreed by the parties hereto that Parent shall be entitled to seek an injunction or injunctions to prevent breaches of the provisions of this Section 4.2 and to enforce specifically the terms and provisions hereof, this being in addition to any other remedy to which Parent may be entitled at law or in equity.

4.3   Shareholder Approval.

(a)  Promptly following the execution of this Agreement, and in any case no later than 11:59 a.m. Pacific Time on the date of execution of this Agreement, the Company shall deliver to Parent a true, correct and complete copy of the Initial Shareholder Consent evidencing the Requisite Shareholder Approval of the adoption of the Merger, this Agreement and the transactions contemplated hereby and the related Tax Elections signed by the Shareholders who executed the Initial Shareholder Consent.

(b)  As soon as practicable following the execution and delivery of this Agreement, the Company shall take all action reasonably necessary in accordance with this Agreement, California Law and the Charter Documents to solicit a written consent from each Shareholder who did not execute the Initial Shareholder Consent.  Promptly following the Company’s receipt of the Initial Shareholder Consent, but in no event later than two Business Days after Parent, in its reasonable discretion, has approved the Soliciting Materials pursuant to this Section 4.3, the Company shall deliver to any Shareholder who did not execute the Initial Shareholder Consent a notice of approval of the Merger and the adoption of this Agreement by written consent of the Shareholders pursuant to the applicable provisions of California Law, including Section 603 and Chapter 13 thereunder, and the Charter

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Documents, which notice shall constitute the notice to Shareholders required by California Law that dissenters’ rights may be available to Shareholders in accordance with California Law.

(c)  Any information statement or other material to be submitted to the Shareholders in connection with the Company’s solicitation of the Shareholders described above or notices with respect to dissenters’ rights (the “Soliciting Material”) shall be subject to review and approval by Parent (which approval shall not be unreasonably withheld or delayed), shall include information regarding the Company, the terms of the Merger, the Agreement of Merger, this Agreement (including the obligations set forth in Article VII hereof and the appointment of the Shareholder Representative) and the unanimous recommendation of the Board of Directors of the Company in favor of the adoption of this Agreement and approval of the Merger and the other transactions contemplated hereby and will not contain any untrue statement of a material fact and shall not omit to state any material fact necessary in order to make the statements made therein, in light of the circumstances under which made not misleading.  All Soliciting Materials shall include the unanimous recommendation of the Board of Directors of the Company that all Shareholders consent to the adoption of this Agreement and approve the Merger and the other transactions contemplated hereby.  Neither the Board of Directors of the Company nor any committee thereof shall withhold, withdraw, amend or modify, or propose to withhold, withdraw, amend or modify, such unanimous recommendation.  The Company shall promptly advise Parent in writing if at any time prior to the Closing, the Company shall obtain knowledge of any facts that might make it necessary or appropriate to amend or supplement the Soliciting Materials in order to make statements contained or incorporated by reference therein not misleading or to comply with applicable law.  Anything to the contrary contained herein notwithstanding, the Company shall not include in the Soliciting Materials any information with respect to Parent or its affiliates which has not been consented to in writing by Parent prior to such inclusion (which consent shall not be unreasonably withheld or delayed), except as required pursuant to applicable law.

4.4   Key Employees.  Prior to the Closing, the Key Employees will have executed offer letters for at-will employment with Parent, the Surviving Corporation or one of their respective Subsidiaries, such employment to be conditioned upon the Closing.  Such employment will (a) be in compliance with any standard human resources policies and procedures of Parent, including, if necessary, requirements for proof evidencing a legal right to work in the U.S. and the execution of Parent’s standard form of employee proprietary information agreement; (b) have terms, including the position and responsibilities of such Key Employee as determined by Parent in consultation with the Company; and (c) supersede any prior employment agreements and other arrangements with such Key Employee in effect.

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ARTICLE V

ADDITIONAL AGREEMENTS

5.1   Commercially Reasonable Efforts to Complete.  Upon the terms and subject to the provisions set forth in this Agreement, each of Parent, Merger Sub and the Company shall use its commercially reasonable efforts to take, or cause to be taken, all actions, and to do, or cause to be done, and to assist and cooperate with the other party or parties hereto in doing, all things reasonably necessary, proper or advisable to consummate and make effective, in the most expeditious manner practicable, the transactions contemplated by this Agreement (but in the event the Merger does not close for any reason, none of the parties hereto shall have any Liability to the other parties hereto or any other Person for any costs, claims, liabilities or damages resulting from such party seeking to take the following actions), including by:

(a)  using its commercially reasonable efforts to cause the conditions to the Merger set forth in Article V to be satisfied or fulfilled;

(b)  using its commercially reasonable efforts to obtain all necessary consents, waivers and approvals of any parties to any Contracts to which the Company is a party as are required in connection with the Merger in order to ensure that all such Contracts remain in full force and effect from and after the Effective Time in accordance with their respective terms and to preserve all rights of, and benefits to, Parent and the Surviving Corporation under such Contracts from and after the Effective Time, including the consents set forth on Section 2.6 of the Disclosure Schedule; provided that all such consents, waivers and approvals shall be in a form and substance reasonably acceptable to Parent, which approval Parent shall not unreasonably withhold, delay or condition; provided further that in the event that the other parties to any such Contract to which any such consent, waiver or approval pertains, conditions its grant of a consent, waiver or approval (including by threatening to exercise a “recapture” or other termination right) upon or otherwise requires in response to a notice or consent request relating to this Agreement, the payment of a consent fee, “profit sharing” payment or other consideration, including increased rent payments or other payments under the Contract or the provision of material additional security (including a guaranty), the Company shall not make or commit to make any such payment or provide any such consideration without Parent’s prior written consent;

(c)  making all necessary registrations, declarations and filings with Governmental Entities in connection with this Agreement and the consummation of the transactions contemplated hereby, and obtaining all necessary actions or non-actions, waivers, clearances, consents, approvals, orders and authorizations from Governmental Entities in connection with this Agreement and the consummation of the transactions contemplated hereby;

(d)  using commercially reasonable efforts to support the preparation by KPMG of financial statements in accordance with GAAP and by PWC to conduct an audit of such financial statements;

(e)  taking such action necessary to qualify the issuance of the shares of Parent Common Stock representing the Merger Share Amount as a private placement under Section 4(2) of the Securities Act or Regulation D thereunder, including, as applicable, appointing a “purchaser representative” (as defined by Rule 501(h) promulgated under the Securities Act); and

(f)  executing and delivering any additional mutually acceptable instruments mutually deemed necessary to consummate the transactions contemplated by, and to fully carry out the purposes of, this Agreement.

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5.2   Regulatory Approvals.

(a)  Parent and the Company agree to cooperate, coordinate and to use their commercially reasonable efforts to prepare and submit, and the Company shall cause any Principal Shareholder subject to Section 5.2(b) to use commercially reasonable efforts to prepare and submit, any filings or submissions required under the HSR Act and any other federal, state or foreign law, regulation or decree designed to prohibit, restrict or regulate actions for the purpose or effect of monopolization or restraint of trade (collectively “Antitrust Laws”) as soon as practicable, but no later than two Business Days after the date of this Agreement.  Parent and the Company further agree to cooperate and to use their commercially reasonable efforts, and the Company shall cause any Principal Shareholder subject to Section 5.2(b) to cooperate and to use commercially reasonable efforts, to obtain any government clearances or approvals required prior to Closing under the Antitrust Laws, to respond to any preliminary government requests for information under any Antitrust Law, to respond to any government investigation or further requests for information under any Antitrust Law, and to contest and resist any action, including any legislative, administrative or judicial action, and to have vacated, lifted, reversed or overturned any decree, judgment, injunction or other order (whether temporary, preliminary or permanent) that restricts, prevents or prohibits the consummation of the Merger or any other transactions contemplated by this Agreement under any Antitrust Law; provided, however, nothing contained in this Agreement, will require Parent or any of its affiliates to (i) appeal any preliminary injunction entered in connection with the foregoing or (ii) agree to (A) any license, sale or other disposition or holding separate (through establishment of a trust or otherwise) of any shares of capital stock or of any business, assets or properties of Parent, its Subsidiaries or affiliates or of the Company, (B) the imposition of any material limitation on the ability of Parent, its Subsidiaries or affiliates or the Company to conduct their respective businesses or own any capital stock or assets or to acquire, hold or exercise full rights of ownership of their respective businesses and, in the case of Parent, the businesses of the Company, or (C) the imposition of any material impediment on Parent, its Subsidiaries or affiliates or the Company under any Antitrust Laws (any such action described in (A), (B) or (C), an “Action of Divestiture”). In connection with obtaining such clearances or approvals, the parties hereto will consult and cooperate with one another, and consider in good faith the views of one another, in connection with, and provide to the other parties in advance, any analyses, appearances, presentations, memoranda, briefs, arguments, opinions and proposals made or submitted by or on behalf of any party hereto in connection with proceedings under or relating to any Antitrust Law.  Fees payable to Governmental Entities in connection with filings required by any Antitrust Laws pursuant to this Section 5.2(a) will be borne 50% by the Company and 50% by Parent.  In connection with the foregoing, each party (i) will promptly notify the other party in writing of any communication received by that party from any Governmental Entity and, subject to applicable Law, provide the other party with a copy of any such written communication (or written summary of any oral communication) and (ii) will not participate in any substantive meeting or discussion with any Governmental Entity in respect of any filing, investigation or inquiry concerning the transactions contemplated by this Agreement unless it consults with the other party in advance and, to the extent permitted by such Governmental Entity, give the other party the opportunity to attend and participate thereat.

(b)  If, in connection with the transactions contemplated by this Agreement, any Principal Shareholder is required to make a filing pursuant to any Antitrust Laws, he shall promptly make such filing and use commercially reasonable efforts to obtain such authorization or clearance.  Fees payable to Governmental Entities in connection with filings required by any Antitrust Laws pursuant to this Section 5.2(b) will be borne by the Principal Shareholder required to make such filing (or by the Company on his behalf).

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5.3          Notification of Certain Matters.

(a)   During the Pre-Closing Period, (i) the Company shall give prompt notice to Parent of (A) the occurrence or non-occurrence of any event, the occurrence or non-occurrence of which to the Knowledge of the Company causes any representation or warranty of the Company contained in this Agreement to be untrue or inaccurate in any material respect at or prior to the Effective Time and (B) any failure of the Company to comply with or satisfy any covenant or agreement to be complied with in any material respect or any condition to be satisfied by it hereunder and (ii) the Company shall use its reasonable efforts to give prompt notice to Parent if the Company has any Knowledge of the Company of (A) the occurrence or non occurrence of any event, the occurrence or non occurrence of which the Company suspects would cause any representation or warranty of Parent contained in this Agreement to be untrue or inaccurate in any material respect at or prior to the Effective Time and (B) any failure of Parent or Merger Sub to comply with or satisfy any covenant, condition or agreement to be complied with in any material respect or any condition to be satisfied by it hereunder.

(b)   During the Pre-Closing Period, (i) Parent shall give prompt notice to the Company of (A) the occurrence or non-occurrence of any event, the occurrence or non-occurrence of which to its knowledge causes any representation or warranty of Parent contained in this Agreement to be untrue or inaccurate in any material respect at or prior to the Effective Time and (B) any failure of Parent or Merger Sub to comply with or satisfy any covenant, condition or agreement to be complied with in any material respect or any condition to be satisfied by it hereunder and (ii) Parent shall use its reasonable efforts to give prompt notice to the Company if Parent has any knowledge of (A) the occurrence or non-occurrence of any event, the occurrence or non-occurrence of which Parent suspects would cause any representation or warranty of the Company contained in this Agreement to be untrue or inaccurate in any material respect at or prior to the Effective Time and (B) any failure of the Company to comply with or satisfy any covenant or agreement to be complied with in any material respect or any condition to be satisfied by it hereunder.

(c)   The delivery of any notice pursuant to this Section 5.3 shall not (i) limit or otherwise affect any remedies otherwise available hereunder to Parent or the Company, as applicable, or (ii) constitute an acknowledgment or admission of a breach of this Agreement.

5.4          Access to Information.  During the Pre-Closing Period, the Company shall afford Parent and its accountants, counsel and other representatives, reasonable access during Company’s normal business hours to (a) all of the Company’s properties, books, Contracts, commitments and records; (b) all other information concerning the business, properties and personnel (subject to restrictions imposed by applicable law) of the Company as Parent may reasonably request; and (c) all employees of the Company as identified by Parent.  The Company shall provide to Parent and its accountants, counsel and other representatives copies of internal financial statements (including Returns and supporting documentation) promptly upon request.  The information discovered through the access afforded pursuant to this Section 5.4 shall not (i) limit or otherwise affect any remedies otherwise available hereunder to Parent or the Company, as applicable, or (ii) constitute an acknowledgment or admission of a breach of this Agreement.  No information discovered about the Company through the access afforded pursuant to this Section 5.4 shall affect or be deemed to modify, amend or supplement any representation or warranty set forth herein, the Disclosure Schedule or the conditions to the obligations of the parties to consummate the transactions contemplated by this Agreement in accordance with the terms and conditions hereof, or limit any right to indemnification provided herein.

5.5          Public Disclosure.  The Company acknowledges and agrees that neither it nor any officer, director, employee, independent contractor or representative of the Company shall issue any statement or

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communication to the public or the press regarding this Agreement or the transactions contemplated hereby without the prior written consent of Parent; provided, however, that if the Company is required under law to make such a statement or communication, then the Company shall provide Parent with an opportunity to review and comment on both the legal requirement to make such statement or communication and the content thereof. The Company acknowledges and agrees that Parent, without the prior written consent of the Company, may make public statements and disclosure regarding this Agreement and the transactions contemplated hereby to the extent required to comply with applicable securities Laws and the applicable rules of The NASDAQ Stock Market.

5.6          Fees and Expenses.  Except as otherwise provided in this Agreement, (a) all Third Party Expenses of Parent or Merger Sub shall be paid by Parent whether or not the Merger is consummated, and (b) all Third Party Expenses of the Company, the Principal Shareholder and the Shareholder Representative shall be obligations of the Shareholders, which shall be paid by the Company at or prior to the Closing.  The Company shall provide Parent with a statement of Estimated Unpaid Third Party Expenses showing detail of the Unpaid Third Party Expenses incurred and expected to be incurred by the Company (including any Unpaid Third Party Expenses anticipated to be incurred after the Closing) not less than five Business Days prior to the Closing Date in form reasonably satisfactory to Parent and certified as the Company’s good faith estimate as of the Closing Date by the Company’s Chief Executive Officer (the “Statement of Expenses”).  Prior to the Closing, the Company shall (i) use its commercially reasonable efforts to obtain final invoices with respect to all Unpaid Third Party Expenses set forth on the Statement of Expenses, and (ii) pay in full all Unpaid Third Party Expenses on or prior to the Closing.  Any Unpaid Third Party Expenses incurred by the Company that are not reflected as a Liability on the Statement of Expenses or not otherwise reflected on the Company Closing Balance Sheet shall be subject to the indemnification provisions of Article VII.

5.7          Lease Term.  Until October 31, 2012, Parent intends to continue to retain the operations of the Company at its current main office location.

5.8          Employee Matters.

(a)   Termination of Plans.  Unless otherwise directed in writing by Parent at least five Business Days prior to the Closing Date, the Company agrees to terminate any and all group severance, separation or salary continuation plans, programs, or arrangements that are covered under ERISA, as of 11:59 p.m. Pacific time on the Closing Date.

(b)   New Employment Arrangements.

(i)    Parent, the Surviving Corporation or one of their respective Subsidiaries may offer “at-will” employment to certain employees of the Company.  Such “at-will” employment arrangements will supersede any prior employment agreements and other arrangements with such employee in effect prior to the Closing Date.  Each of the Continuing Employees shall enter into the Parent’s standard agreement regarding confidential and proprietary information and Parent’s standard form of offer letter subject to the Closing (with such modifications as determined by Parent).  The provisions of this Section 5.8(b) shall not apply to the employment of the Key Employees, whose terms and conditions of employment shall be governed separately by the Offer Letters.

(ii)   Each Key Employee shall sign an Offer Letter in connection with the Closing.

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(c)     Retention Bonus Pool.